Global miner Glencore said on Friday its proposal for Teck Resources still stands, following Canada’s largest diversified miner withdrawing its separation proposal.
Teck unanimously rejected Glencore's $23 billion (R400bn) bid for it and said the offer was an unsolicited and opportunistic acquisition proposal from Glencore. Teck instead said it wants to continue with its own plan to split into a coal company and a metals business.
On Wednesday, Teck withdrew its separation proposal hours before shareholders were scheduled to vote on it.
Teck Resources chief executive Jonathan Price said: “We received very strong support from shareholders for the goal of separation, which is to unlock value through the creation of a premier, pure-play base metals company and a world-class steel-making coal company. We have also listened and heard the feedback that some shareholders would prefer a more direct approach to separation.
"Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders.”
In a statement, Glencore said it noted the decision by Teck to withdraw its separation proposal and its recognition that a simple and direct approach to separation provided a better path to unlocking value for Teck shareholders.
"Glencore’s proposal provides Teck shareholders with a clean separation for its coal business, while also creating significant additional value for Teck’s shareholders in which they would fully and disproportionately share," the group said.
In its proposal, Glencore suggested a separate company, MetalsCo, which would include Glencore and Teck’s industrial metals businesses, as well as the London-listed company’s oil trading division.
Glencore said it remained willing to engage the board and management of Teck to address the issues they had raised.
"We believe that with engagement, we could further improve our proposal’s structure, terms, and value, which would be in the best interests of all Teck shareholders," it said.
Glencore said it hoped the Teck board would, against the backdrop of the feedback provided by its shareholders, engage constructively in order to fully explore its proposal, which has not been done to date.
"Glencore remains willing to make an offer directly to Teck shareholders if there continues to be no engagement from the Teck board," Glencore said.
Glencore said it also remained committed to ensuring its proposal delivers real benefits to Canada, including through a MetalsCo that will have its global asset footprint, including significant critical minerals and recycling operations, in Canada and managed from Canada.
"Glencore looks forward to engaging with its Canadian stakeholders to ensure that they are provided with an accurate picture of Glencore’s extensive business in Canada, the significant investments Glencore has already made in developing critical minerals in Canada, as well as our commitment to being a responsible and ethical operator wherever we work," the group said.
Meanwhile, Glencore announced it had reached a binding agreement with Norsk Hydro, one of the world’s leading low-carbon aluminium companies, to acquire a 30% equity stake in Alunorte and a 45% equity stake in Mineracão Rio do Norte.
Glencore said it was acquiring these non-controlling stakes for a combined equity value of about $775 million, based on an agreed proportionate look through Enterprise Value and a net debt of $335m in the business as at March 31 this year.
"The transaction has an effective date of June 30, 2023 and includes certain post-closing adjustments, based on the performance of Alunorte over a 21-month period from June 30, 2023," the group said.
Glencore’s share price on Friday closed 2.72% lower at R107.59.
BUSINESS REPORT